HomeMy WebLinkAbout12 APPROVE RENTAL AGREEMENT WITH CORPORATE LIQUIDATION SERVICESAgenda Item 12
Reviewed:
AGENDA REPORT City Manager
Finance Director 1A
MEETING DATE: JUNE 17, 2014
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: CITY MANAGER'S OFFICE
SUBJECT: RENTAL AGREEMENT BETWEEN THE CITY OF TUSTIN AND
CORPORATE LIQUIDATION SERVICES FOR A PORTION OF
THE BUILDING LOCATED AT 15171 DEL AMO AVENUE
SUMMARY:
Approval is requested for a. Three (3) Year Rental Agreement between the City and
Corporate Liquidation Services (Tenant), for a City -owned property located at 15171 Del
Arno Avenue.
RECOMMENDATION:
It is recommended that the City Council authorize the City Manager to execute the
attached Rental Agreement with Corporate Liquidation Services and support the finding
that the Rental Agreement is at market value and no further policy directions, as
outlined in Tustin City Code Section 7960(B), are required.
FISCAL IMPACT:
The Rental Agreement requires the Tenant pay rent in an amount of $89,700 for the first
year for approximately 23,000 square feet in the northernmost section of the subject
building. The property has been marketed "As Is" on a short term or month -to -month
basis and the rental rate is competitive within the market area with rents for similar
properties with limiting lease terms. During the first year, the Tenant will pay $.20 per
square foot for the first three months, $.30 per square foot for the next three months and
$.40 per square foot for the balance of the first year. In subsequent years, the rate will
increase 3% annually. During the first year of the Rental Agreement, the net rent
proceeds available to the City General Fund will be $84,318, net of the 6% broker
commission for the first year of $5,382. Although it is standard business practice for the
brokerage fees to be paid upon agreement execution and to be based on the total rent
generated during the term of an agreement, fees will be paid annually in order to reflect
the option for either party to terminate at any time during the three -year Rental
Agreement.
Agenda Report
June 17, 2014
Page 2
ALIGNMENT WITH STRATEGIC PLAN:
The Rental Agreement with Corporate Liquidation Services is consistent with the City's
value of Fiscal Stewardship. In complying with Tustin City Code Section 7960(B), fact -
based financial decisions ensure the City practices sound stewardship of its existing
assets.
BACKGROUND:
The City owns property at 15171 Del Amo Avenue, as part of a larger acquisition
associated with the new construction of an on -ramp and an off -ramp providing access to
and from State Route 55 to Newport Avenue and Edinger Avenue. Rather than
demolishing the building and associated parking improvements at a cost to the City, it
was determined that rental of the premises in the existing condition would provide
interim rental revenue until such time as the City develops a comprehensive strategy for
marketing the property, market conditions warrant new development, and the City is
able to obtain an adequate financial return for its original acquisition expenses. In
January 2010, the City entered into a brokerage agreement with Lee & Associates to
seek tenants for the building as a light industrial use, distribution use, or warehouse use
(the legal non - conforming uses currently authorized on the property).
On May 6, 2014, the City Council approved a Three Year Rental Agreement with .the
Tenant. The Tenant was in the process of consolidating operations and, despite the
clear language in the Rental Agreement, thought they could use a portion of the space
as a showroom for customers. Believing they could find space for all facets of their
operation, the Tenant chose not to execute the Agreement. The Tenant has not been
successful in locating an all- encompassing facility and, as a result, has submitted a
revised proposal to lease 10,000 square feet for three months, grow to 16,000 square
feet after fourth months, and lease the entire 23,000 square feet in January. Rather
than placing staff in a position of continually monitoring the Tenant's compliance with
only occupying the leased space, staff is recommending to lease the Tenant the entire
space (23,000 square feet) at a discounted rate similar to leasing a portion of the space
at $.40 per square foot. The $.20 per square foot lease rate for the first three months is
calculated as if the Tenant occupied 11,500 square feet at $.40 per square feet. At the
beginning of month four, October 2014, the $.30 per square foot lease rate is calculated
as if the Tenant occupied 17,250 square feet at $.40 per square feet. Beginning month
seven, January 2015, the Tenant will pay $.40 per square foot for the entire 23,000
square feet. During the first six months when the Tenant is receiving a discounted rate,
Lee & Associates will continue to market the property. If the City receives an offer to
lease the entire 23,000 square feet, the Tenant has five (5) business days to match the
offer. If the Tenant does not match the offer, they will be given a thirty (30) day Notice
to Terminate. The 30 day notice only applies during the first six months.
Agenda Report
June 17, 2014
Page 3
In their proposal, the Tenant requested a three year term. In order to maintain flexibility
for site development, staff is recommending a minimum one year term with the City
option at any point after the sixth month to give the Tenant a six -month Notice to
Terminate. The Tenant has the option at any point after the ninth month to give the City
a three -month Notice to Terminate. The premises will be rented on a triple -net basis,
meaning the Tenant will pay all real estate taxes, insurance, maintenance, repairs,
utilities and other items associated with tenancy. The Tenant will also be responsible
for any additional capital expenses including tenant improvements and repairs to the
facility and will accept the property in an "AS -IS WHERE -IS" condition.
Tustin City Code (TCC) Section 7960, as enacted by Ordinance No. 1389, outlines the
process City staff must follow for the approval, extension or modification of any existing
City real property lease for less than market value. In the event a lease is less than
market value, then staff must seek policy direction from the City Council as outlined in
TCC Section 7960(6).
Staff, in working with Lee & Associates, has reviewed comparables to confirm current
asking rates for dead storage type spaces are in the same market range as the Del
Amo building and the proposed Rental Agreement is not for less than market value.
This space has been on the market for over four (4) years, it is leased on an "AS IS"
basis only and is limited to a short term, month -to -month term, or includes a termination
clause which does not completely guarantee a Tenant of longer'term occupancy (as
normal rental rates are usually based on a three (3) to five (5) year initial term). In view
of these facts, staff and Lee & Associates have determined and concur that the
proposed rental rate of $.40 per square foot is at market value. As a result, the
proposed Rental Agreement does not trigger further actions as outlined in TCC Section
7960(6).
Upon execution of the Agreement, the Tenant shall be required to pay a security deposit
which is the equivalent of one month's rent and the first month's rent. Staff will be
available to answer any questions the City Council may have.
Jerry'mic' "�� )
Ec nomic Develo e o ing Manager
Rental Agreement between the City and Corporate Liquidation
Services
RENTAL AGREEMENT
1. PARTIES: The parties to this Rental Agreement are the City of Tustin, a municipal
corporation ( "City"), and Corporate Liquidation Services ( "Tenant'), a Nevada corporation.
2. RECITALS: This Rental Agreement is made with reference to the following facts:
(a) The City has acquired the property commonly known as 15171 Del Amo Avenue, Tustin,
CA 92780 ( "Premises ") for a planned redevelopment project (the "Project').
(b) If Tenant chooses to occupy the Premises as a new tenant, Tenant understands it will not be
eligible for relocation payments or assistance under the California Relocation Assistance and Real
Property Acquisition Guidelines, Title 25, California Code of Regulations, Chapter 6, Section
6000 et seq. (the "Guidelines ").
(c) Tenant has a desire to rent approximately 23,000 square feet of the northern section of the
Premises and may use and occupy the Premises for the purpose of storage of office equipment
and warehousing use only. The Premises are restricted to Tenant employees and retail sales are
not permitted. Any other use of the Premises will constitute a breach of this contract and may
result in an eviction.
(d) By this Rental Agreement, the parties intend to establish a landlord/tenant relationship
between them and to specify the rights and duties of the respective parties with reference to the
Premises.
3. PREMISES: City does hereby rent to Tenant and Tenant hereby rents from City that
certain real property situated in the City of Tustin, County of Orange, State of California,
commonly known as 15171 Del Amo Avenue and as shown on Exhibit A. The Land and
Buildings are collectively referred to as the "Premises"
4. TERM: The term of this Rental Agreement shall commence on July 1, 2014,
( "Commencement Date ") and shall be in full force and effect through June 30, 2017, unless
otherwise terminated as provided herein ( "Termination Date "). At any time during the first six
(6) months of this Rental Agreement when the Tenant is paying a discounted rate, the City
reserves and shall have the right to lease the Premises to another tenant at the market rate of
$9,200 /month. Upon receiving a competing offer to lease the Premises at the market rate, the
City shall notify Tenant in writing of the competing offer. The Tenant shall have five (5)
business days from the date of the notice to exercise its first right of refusal and match the
competing offer ( "Right of Refusal "). If the Tenant does not exercise its Right of Refusal and
agree to match the offer, the City shall provide the Tenant a thirty (30) day notice to vacate. In
any such event, Tenant agrees to vacate the Premises on or before the noticed termination date.
At any time after six months into this Rental Agreement (January 1, 2015), the City may cause
an earlier termination to this Rental Agreement by providing a notice to the Tenant six (6)
months prior to the requested termination. At any time after nine months into this Rental
Agreement (April 1, 2015), the Tenant may cause an earlier termination to this Rental
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Agreement by providing a notice to the City three (3) months prior to the requested termination.
Should this occur, the Tenant agrees to vacate the Premises on or before the noticed termination
date. The Commencement Date shall be the date when Section 19. Insurance and Indemnity
requirements are met and the Rental Agreement is executed by all parties. Notwithstanding any
of the foregoing, Tenant will not receive approval to occupy until they have made the required
repairs listed on Exhibit B — Terms of Condition to Occupy. Tenant agrees to vacate the
Premises on or before the Termination Date.
5. RENT: For Purposes of this Rental Agreement, Base Rent and Cost Reimbursements are
hereinafter collectively referred to as Rent.
5.1 Base Rent.
5.1.1 Effective July 1, 2014, the Tenant shall pay the City the monthly sum of
Four Thousand Six Hundred Dollars ($4,600) for the Premises, a discounted rate of
$.20 /sq. ft. for 23,000 square feet. It is payable in advance.
5.1.2 Effective October 1, 2014, the Tenant shall pay the City the monthly sum of
Six Thousand Nine Hundred Dollars ($6,900) for the Premises, a discounted rate of
$.30 /sq. fr. for 23,000 square feet. It is payable in advance.
5.1.3 Effective January 1, 2015, the Tenant shall pay the City the monthly sum of
Nine Thousand Two Hundred Dollars ($9,200) for the Premises, payable in advance.
5.1.4 Effective each July, the rent shall increase 3% annually. On July 1, 2015,
the Tenant shall pay the City the monthly sum of Nine Thousand Four Hundred and
Severity -Six Dollars ($9,476), prorated on the basis of a thirty (30) day month. On July
1, 2016, the Tenant shall pay the City the monthly sum of Nine Thousand Seven Hundred
and Sixty Dollars ($9,760), prorated on the basis of a thirty (30) day month. If the
Commencement Date is other than the first day of a calendar month, the rent payable
hereunder shall be prorated by the City on the basis of a thirty (30) day month. Checks
should be made out to the "City of Tustin" and delivered to the City in accordance with
Section 5.3.
5.2 Cost Reimbursements. All sums payable by Tenant to City under this Rental
Agreement not otherwise required for Base Rent shall be deemed a Cost Reimbursement ( "Cost
Reimbursement "), including any special costs incurred by City, which are specifically
attributable to an action (or inaction) of Tenant including without limitation Tenant's failure to
provide the protection and maintenance services required by Section 6 herein. The City will
notify the Tenant of such costs on a monthly basis and Tenant will be obligated to pay City
within thirty (30) calendar days of the date of an invoice for such costs.
5.3 Place of Payment. All payments due and owing shall be made by Tenant to the
City, or to another party at such other place as the City may designate in writing from time to
time. Make checks payable to: The City of Tustin, Finance Department, 300 Centennial Way,
Tustin, CA 92780.
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5.4 Late Charge. If payment of or any part thereof to be made by Tenant to City
become overdue for a period in excess of ten (10) calendar days, a late charge equal to ten (10)
percent of such overdue amount shall be paid by Tenant for purposes of defraying the expense
incidental to handling such delinquent payment. Pursuant to California law, if Tenant passes a
check on insufficient funds, Tenant will be liable to the City for the amount of the check plus a
service charge of $55.00 for the first check passed on insufficient funds, and $55.00 for each
subsequent check passed on insufficient funds. City may require future payments to be in a form
other than a personal check in the event of a returned check, at City's sole discretion.
5.5 No City Responsibilities. The Tenant hereby acknowledges and agrees that the
City is not responsible for any costs, charges, expenses, outlays or any nature whatsoever arising
from or relating to the Premises, or the use or occupancy thereof, of the contents thereof or the
business carried on therein, and that Tenant shall pay all charges, impositions, costs and
expenses of every nature and kind related to the Premises, including costs of maintenance and
repair of the Premises, all costs of insuring the Premises, and all taxes and assessments
attributable to the Premises and which might be associated with the possessory interest of said
Rental Agreement and personal property of the Tenant.
5.6 Security Deposit. Tenant shall provide a security deposit to City of $9,200 prior to
occupying said premises which shall be refundable upon termination of the Rental Agreement
provided that the Premises is returned to the City upon termination in the condition in which it
was first received. No part of this deposit is to be considered an advance payment of rent,
including last month's rent, nor is it to be used or refunded prior to the leased premises being
permanently and totally vacated by the Tenant.
6. PROTECTION, MAINTENANCE, AND REPAIRS: City will not make any
modifications, alterations, improvements or repairs to the Premises of any nature whatsoever and
the Premises is rented to Tenant in an "As -Is Where Is, With ALL Faults basis ", in its present
state and condition with all faults. Tenant acknowledges that the City has made no
representations or warranties of any kind whatsoever, either express or implied in connection
with any matters with respect to the Premises, or any portion thereof. Tenant shall be allowed
no credit by the City for costs of any repair work performed or ordered by Tenant to the
Premises. Tenant shall, at Tenant's own expense, maintain and repair the Premises in good order
and condition as the same were on Commencement Date and as improved by Tenant Pursuant to
Section 7. The degree of such maintenance and repair to be furnished by Tenant shall be that
which is sufficient to maintain weather tightness, structural stability, protection from fire
hazards, elimination of safety and health hazards which may arise during the term of this Rental
Agreement. The City, upon due notice, may inspect the Premises to insure performance of the
maintenance required. Further, Tenant shall be responsible for the repair and maintenance of all
interior utility systems and those exterior utility systems, distribution lines, connections and
equipment which support the Premises.
6.1. Security and Fire Protection. Tenant shall provide for all security and safety
within the Premises.
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7. ALTERATIONS: Prior to receiving approval to occupy, Tenant will make the required
repairs listed on Exhibit B — Terms of Condition to Occupy. Beyond these required repairs,
Tenant will make no alterations or additions in or to the Premises, or contract for any alterations
or additions, without written approval of the City.
8. WAIVERS
8.1 Waiver of Claims. Neither the City of Tustin or the Tustin Community
Redevelopment Agency ( "Agency ") nor any of their officers, agents, representatives and
employees will be liable and Tenant waives all claims for damage to persons or property
sustained by Tenant or any occupant of the Premises resulting from the Premises or any part of
it, becoming out of repair, resulting from any accident in or about the Premises or resulting
directly or indirectly from any act or neglect of Tenant, occupant or of any other person
including Tenant's agents and employees. All property belonging to Tenant or any occupant of
the Premises will be there at the risk of Tenant or such other person only and City will not be
liable for damages, theft or misappropriation.
8.2 Relocation and Compensation waivers. Tenant by signing this Rental Agreement
is waiving any and all rights of any kind or amount for relocation benefits including but not
limited to any such or similar rights prescribed by any state, federal or local law and/or
regulation and waiving any and all rights to just compensation under U.S. and California
constitutions, and agreeing and acknowledging that they waive any rights to payments for Loss
of Goodwill.
8.3 No Waivers. The failure or omission of City to terminate this tenancy for any
violation of any of its terms, conditions or covenants, shall not be deemed to be a consent by City
to such violation and shall not bar, stop or prevent City from terminating this Agreement
thereafter, either for such or for any subsequent violation of any such term condition or covenant.
The acceptance of rent under this Agreement shall not be or be construed to be a waiver of any
breach of any term covenant or condition of this Agreement. Nothing contained in this
Agreement shall be construed as limiting City from performing all acts required by City in
connection with the relocation of occupants of the Premises, or taking such steps as it may deem
necessary to remove occupants of the Premises at any time.
9. CLEANLINESS AND WASTE: Tenant will keep the Premises and the walks /alley
adjacent to it at all times in a neat, clean and sanitary condition, free from waste or debris and
will neither commit nor permit any waste or nuisance on the Premises nor store materials
hazardous to health or safety. Debris, trash, and other used materials shall be promptly removed
from the Premises and the Premises shall be kept reasonably clean and free of unused materials
at all times. At termination, the Premises shall be left without containers, tenant's equipment,
and other undesirable materials, and in an acceptably clean condition.
10. VACATION OF PREMISES: Tenant will give the City immediate notice of his/her
intention to move or vacate the Premises, and on that vacation agrees to leave same in good
condition, clear of all debris, hazardous materials and personal property.
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11. DAMAGE TO PREMISES: Any damage to the Premises in excess of above ordinary
and normal usage may be charged to the Tenant.
12. NUISANCE AND WASTE: Tenant shall not commit, suffer or permit any nuisance or
waste in or about the Premises, and shall not permit the use of the Premises for any illegal or
immoral purpose. Tenant further agrees to comply with all State and Federal laws and local
ordinances concerning the Premises and the use of the Premises.
13. INSPECTION BY CITY: City by and through its employees or agents, shall have the
right to enter upon the Premises at all reasonable times during the term of this tenancy for the
purpose of inspecting the same, making such repairs as City may deem desirable, and conducting
any investigation, study or remediation activity the City may deem desirable upon providing
Tenant with reasonable advance notice, whenever practicable.
14. PERSONAL PROPERTY LEFT ON PREMISES: City shall have the right,
WITHOUT NOTICE, to sell, destroy or otherwise dispose of any personal property left on the
Premises by Tenant after he /she has vacated or abandoned the Premises, or when this tenancy
has been terminated, or when Tenant may be evicted from the Premises.
15. DEFAULT AND TERMINATION UPON DEFAULT:
15.1 Events of Default. The following events shall constitute events of default under
this rental agreement:
(a) A default by Tenant in payment when due of any rent or other sum payable under this
Agreement and the continuation of this default for five (5) or more days after notice of
the default by the City.
(b) A default by Tenant in the performance of any of the terms, covenants, or conditions
of the Agreement, other than a default by Tenant in the rent payment, and the
continuation of the default beyond fifteen (15) days after notice by City, or if the default
is curable and would require more than fifteen days, then such reasonable time to cure as
authorized by the City.
(c) The bankruptcy or insolvency of Tenant.
(d) The appointment of a receiver for a substantial part of Tenant's assets.
(e) Tenant's abandonment of the Premises.
(f) The levy upon this Rental Agreement by attachment or execution and the failure to
have the attachment or execution vacated within thirty (30) days.
15.2 Termination Upon Default. On the occurrence of any event of default by Tenant,
City may, in addition to any other rights and remedies given here or by law, terminate this Rental
Agreement and exercise remedies relating to it without further notice or demand in accordance
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with the following provisions'.
(a) So long as the event of default remains uncured, City shall have the right to give
notice of termination to Tenant, and on the date specified in the termination notice, this
Rental Agreement shall terminate.
(b) If this Rental Agreement is terminated, City may, by judicial process, reenter the
Premises, remove all persons and property, and repossess and enjoy the Premises, all
without prejudice to other remedies that City may have because of Tenant's default or the
termination.
(c) If this Rental Agreement is terminated, City shall have all of the rights and remedies
of a landlord provided by Civil Code section 1951.2, in addition to any other rights and
remedies City may have.
If any rent shall be due or unpaid, or if default shall be made in any of the provisions otherwise
contained in this Rental Agreement on the part of Tenant to be observed and performed, City
may exercise any and all remedies provided by law or equity by reason of such default, including
without limitation the right at City's option of terminating this tenancy. Each and all of the
remedies of City shall be construed as cumulative and no one of them as exclusive of the other or
as exclusive of any remedy provided by law or equity.
16. UTILITIES AND TAXES: The Premises has one electric meter for the entire facility
and it is currently in the name of the National Office Liquidators, the tenant renting space in the
southern section of the facility. Prior to approval to occupy at identified in Exhibit B — Terms
of Condition to Occupy, the Tenant will enter into a cost - sharing agreement with the existing
tenant to pay for electric utilities, subject to any license approval of tenancy by City.
17. DAMAGE BY FIRE: In the event the Premises are destroyed or so damaged by fire or
other casualty or act of God, then this Rental Agreement shall terminate, and any advance or
unearned rent that may have at such time been paid will be refunded to the Tenant on a pro rata
basis.
18. ASSIGNMENT AND SUBLETTING: Tenant shall not assign this tenancy in whole or
in part, nor sublet the Premises or any portion of the Premises. In the event of a breach of this
condition, City shall have the power to immediately declare this Rental Agreement terminated
and will then be entitled to immediate possession of the Premises.
19. INSURANCE AND INDEMNITY:
19.1 Insurance. Tenant shall provide and maintain in full force and effect at its own
expense during the Term of this Rental Agreement the following insurance covering its
operations under this Rental Agreement. Such insurance shall be provided with insurers licensed
to do business in the State of California, with a rating of at least A VII, according to the latest
Best's Key Rating Guide or A -X (if offered by a surplus line carrier that is non - admitted).
Evidence of such insurance shall be delivered to City prior to the Commencement Date, .
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including provision of certificates of insurance and required insurer endorsements. Insurance
endorsements (or a copy of the policy, if applicable) shall be provided as evidence of meeting the
requirements of this Section. If self - insured for workers compensation, Tenant shall submit to
the Lessee a copy of its certification of self - insurance issued by the Department of Industrial
Relations. The Insurers shall specifically identify this Rental Agreement and shall contain
express conditions. Such insurance, shall include an endorsement that coverages are to be
primary to and not contributing with any other insurance maintained by City, and an
endorsement shall name the City, and their respective officers, officials, employees, agents and
contractors as additional named insured (except for workers' compensation insurance) and by an
endorsement provide that all losses shall be payable notwithstanding any act or failure to act or
negligence of City, or any other person. All insurance shall be maintained on an occurrence
basis. Insurer or Insurer's agent and Tenant shall give the City thirty (30) days advance written
notice of any written material modification or termination of any insurance required under the
provisions of this Rental Agreement. Failure of Tenant to provide such notice shall be deemed a
material breach of this Rental Agreement.
19.1.1 Comprehensive General Liability Insurance. Comprehensive general
liability and property damage insurance covering the rented Premises, contractual, broad
form property damage, and bodily injury or death, with a combined single limit of not
less than $1,000,000 per occurrence with respect to personal injury or death, and
$1,000,000 per occurrence with respect to property damage.
The general liability policy is to contain, or be endorsed to contain, the following
provisions:
(1) The City and their respective officers, officials, employees, agents
and contractors are to be covered as additional named insureds as 'respects: liability
arising out of use of the Premises. The coverage shall contain no special limitations on
the scope of protection afforded to the City, its officers, officials, employees, agents or
contractors.
(2) The Tenant's insurance coverage shall be primary insurance as
respects the City, and their respective officers, officials, employees and contractors. Any
insurance or self - insurance maintained by the City shall be in excess of the Tenant's
insurance and shall not contribute with it.
(3) Any failure to comply with reporting or other provisions of the
policies including breaches of warranties shall not affect coverage provided to the City,
its officers, officials, employees, agents, or contractors.
(4) Coverage shall state that the Tenant's insurance shall apply
separately to each additional insured against whom claim is made or suit is brought,
except with respect to the limits of the insurer's liability.
(5) Each insurance policy shall include an endorsement that the
Insurer waives any right of subrogation against the City which may arise by reason of any
activities of Tenant, City or payments under a policy.
19.1.2 Workers Compensation Insurance. Workers compensation
insurance shall be in an amount and form meeting all applicable requirements of the
California Labor Code, covering all persons providing services by or on behalf of Lessee
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and all risks to such persons. The worker's compensation is to contain, or be endorsed to
contain, a waiver of subrogation against the City.
19.2 Indemnity. Notwithstanding anything to the contrary hereinabove contained,
and irrespective of any insurance carried by Tenant, Tenant shall defend, with counsel acceptable
to City, indemnify, protect, and save harmless City and their respective officers, officials,
employees, agents and contractors from, and shall pay all costs, expenses and reasonable
attorney fees for all trial and appellate levels and post judgment proceedings in connection with
and from any and all demands, claims, actions, proceedings, suits, losses, liens, costs,
judgments, damages or liabilities of any kind and nature whatsoever, including expenses incurred
in defending against legal actions, for death or injury to persons or damage to property and for
civil fines and penalties arising , or for any violation or alleged violation of local, state or federal
law or regulation at the Premises, or for any breach of this Rental Agreement growing out of, or
in connection, or in any manner predicated upon the use of, occupancy of and/or operations
carried on upon the Premises by Tenant, its officers, officials, employees, agents, servants,
guests, invitees, or contractors.
20. NOTICES. Any notice shall be personally delivered or placed in a sealed envelope
postage paid, addressed to the person on whom it is to be served with return receipt requested
and deposited in the United States Mail. Personal service shall be deemed complete upon
delivery and service by mail shall be deemed complete upon receipt as reflected by the return
receipt. The address to be used for any notice served by mail shall be as follows:
Tenant
Corporate Liquidated Services
C/O Carl Weisman, President
2512 Ocean Boulevard
Corona Del Mar, CA 92625
Citv
City Manager
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attention: Jeffrey C. Parker, City Manager
21. REFUND OF RENT: In the event Tenant vacates the Premises and terminates this
tenancy before expiration of the rental term for which rent has been paid, City shall refund the
pro rata portion of such rent which is unearned at the time of vacancy.
22. ANTI- DISCRIMINATION: Tenants agrees that this rental Agreement is made and
accepted on and subject to the following conditions: That there will be no discrimination against
or segregation of any person or group of persons, on account of race, color, sex, age, handicap,
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marital status, religion, national origin or ancestry in the use, occupancy, tenure or enjoyment of
the Premises, nor will Tenant or any person claiming under or through it establish or permit any
practice or practices of discrimination or segregation with reference to the Premises.
23. ATTORNEY FEES. If as a result of a breach or default under this Rental Agreement,
City uses an attorney to secure compliance with Agreement provisions to recover damages, to
terminate this .Agreement, or to evict Tenant, Tenant shall reimburse City, on demand, for all
reasonable attorney fees and expenses incurred by City.
24. KEYS: Tenant agrees on vacating the Premises that Tenant will deliver all keys to the
Premises in the Tenant's possession to the City at the address stated in Section 5.1, and on failure
to deliver the keys, Tenant agrees that rent for the Premises will continue to be paid to the City
until such time as the keys are delivered.
25. TIME OF ESSENCE. Time is of the essence in this Rental Agreement and all of its
provisions.
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u:Uresi
26. ENTIRE AGREEMENT: It is understood that there are no oral agreements between the
parties affecting this Rental Agreement and this Rental Agreement supersedes and cancels any
and all previous negotiations and understanding, if any, between the parties and none will be
used to interpret or construe this Agreement.
Approval as to Form
David E. Kendig
City Attorney
CITY OF TUSTIN
"CITY"
Jeffrey C. Parker, City Manager
Date
Corporate Liquidated Services
"TENANT"
By:
By:
Carl Weisman, President
Name:
Title:
Date:
< Note two corporate signatories authorized to sign by corporation resolution should sign unless
the corporation resolution permits one signatory>
997174.1
�/I
15171 Del Amo Avenue, Tustin
EXHIBIT "A"
Corporate Liquidation Services acknowledges and agrecs that Loading Dock Doors 4 and #9 are }or their
exclusive use and that Loading Docks #6 - 0 are also for their exclusive use in the building. The number of
parkin. spaces for the subject unit is not to exceed twenty (20). Corporate Liquidation Services a;•rees to
utilize parkin, space in a manner that does not interfere wit.i the operations of the other tenants on the
Property.
EXHIBIT B
TERMS OF CONDITION TO OCCUPY
As noted in Section 6. PROTECTION, MAINTENANCE, AND REPAIRS of the Rental
Agreement, the City will not make any improvements or incur any expenses in regards to the
Tenant. Pursuant to Section 7. ALTERATIONS and Section 16. UTILITIES AND TAXES,
Tenant must resolve the following conditions prior to receiving approval from the City to
OCCUPY:
1. BROKEN WATER PIPE — 2 options
a. If the Tenant is strictly using the Premises as a large "storage unit" and employees only
come and go to drop off or pick up furniture, then restrooms are not required AND the
water pipe does not need to be repaired.
b. If employees are based in the Premises, restrooms are required and the Tenant is required
to repair the water pipe.
2. EAST EMERGENCY EXIT DOOR — Insure there is a functioning emergency exit door on
the east side of the building with the following repairs:
a. Place signage above the door which reads as follows:
i. "This door to remain unlocked when building is occupied" with letters I" high with
contrasting background.
b. Glass in the door has been cut. Caulk or glue the cut section on the inside of the door.
3. NORTH EMERGENCY EXIT DOOR — Insure there is a functioning emergency exit door on
the north side of the building with the following repairs:
a. Remove the door from the wall that serves as an entry to the lit northern emergency exit
door.
4. Execute an electric utility cost sharing agreement between the tenant and National Office
Liquidators (NOL) to share electrical costs in the building, subject to any license approval of
tenancy by City. The building currently has one meter and is in the name of NOL.
5. Provide the City with a Release Form from the, contractor(s) that certifies all labor, services,
equipment and material furnished for repair work performed has been paid for in full and
releases any right to a mechanic's lien, stop notice, or any right against a labor and material
bond on the job.
997180.1